GERMAN, FRENCH LEADERS TAKE UKRAINE PEACE PLAN TO MOSCOW

KIEV (TIP): The leaders of Germany and France announced a new peace plan for Ukraine on February 5, flying to Kiev with a proposal they would then take on to Moscow.

The coordinated trip by Chancellor Angela Merkel and President Francois Hollande comes as rebels advanced on a railway hub held by Ukrainian troops after launching an offensive that scuppered a five-month-old ceasefire.

The importance of reaching a deal was demonstrated by a dramatic collapse in Ukraine’s hryvnia currency, which lost nearly a third of its value after the central bank halted daily auctions at which it sold hard currency to banks.

With Washington moving towards a decision soon on arming Ukraine, US Secretary of State John Kerry also visited Kiev on Thursday. He had no plans to go to Moscow and was not involved in the Franco-German initiative, although he supported it.

Moscow said it hoped talks with Merkel and Hollande would be “constructive”.

German government sources said the key problem for resuming peace talks was that the current front line no longer tallies with what was agreed at talks in Minsk, Belarus, last year. One idea was that a new attempt at a ceasefire should take in the current front line, which reflects rebel gains.

For talks to begin anew, Kiev would have to accept that the separatists now control several hundred square kilometers more than agreed in Minsk – – without Kiev having to give up its claim to these areas as part of the Ukrainian state.

In the end, the goal of the peace process should be the restoration of Ukraine’s territorial integrity, the sources said.

Ukrainian Prime Minister Arseny Yatseniuk said Kiev would not consider any peace plan that casts doubt on the nation’s territorial integrity, sovereignty or independence.

The Franco-German plan looks like an eleventh-hour bid to halt the escalation of the conflict ahead of diplomatic deadlines likely to make east-west confrontation even worse.

Peace talks collapsed on Saturday in Belarus and EU leaders are expected to consider new sanctions against Moscow next week.

“Together with Angela Merkel we have decided to take a new initiative,” Hollande told a news conference. “We will make a new proposal to solve the conflict which will be based on Ukraine’s territorial integrity.”

He and Merkel met President Petro Poroshenko in Kiev on Thursday and were expected to go to Moscow to see Russia’s Vladimir Putin on Friday.

Poroshenko said the talks “gave hope that there will be a result in a ceasefire”, his office said in a statement.

Hollande said earlier: “For several days Angela Merkel and I have worked on a text … a text that can be acceptable to all.”

German Foreign Minister Frank-Walter Steinmeier played down the prospect of a breakthrough: “I don’t want to talk about the chances (of success). At this stage there is hope, rather than chances.”

NATO says Russia has sent weapons, funds and troops to assist the rebel advance, negating a ceasefire in eastern Ukraine where war has already killed more than 5,000.

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